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Assume the country of Kitkat ties its currency (the Kat) to the dollar and the exchange rate will remain fixed. Kitkat has frequent trade with

Assume the country of Kitkat ties its currency (the Kat) to the dollar and the exchange rate will remain fixed. Kitkat has frequent trade with countries in the eurozone and the United States. All traded products can easily be produced by all the countries, and the demand for these products in any country is very sensitive to the price because consumers can shift to wherever the products are relatively cheap. Assume that the euro depreciates substantially against the dollar during the next year. What is the likely effect (if any) of the euro's depreciation against dollar on the volume of Kitkat's exports to the eurozone? Will Increase Will decrease Will not be affected Cannot say

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